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Financial Statements and Supplementary Schedules Pursuant to Regulation 1.10 of the Commodity Exchange Act December 31, 2018 (Available for Public Inspection)

BOCI Commodities & Futures (USA) LLC

(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)

Oath or Affirmation …………………………………………………………. 2 Independent Auditor’s Report……………………………………………… 3 Statement of Financial Condition…………………………………………. 4 Notes to the Financial Statement………………………………………… 5 - 12 Supplementary Information: Reconciliation of Statement of Financial Condition to Minimum Net Capital Requirements……………………………………………………………… 14 Statement of the Computation of Net Capital and Minimum Capital Requirements 15 Statement of Segregation Requirements and Funds in Segregation… 16 Statement of Segregation Requirement and Funds in Segregation for Customers’ Dealer Options……………………………………………………………. 17 Statement of Secured Requirement and Funds Held in Separate Accounts 18 Statement of Cleared Swaps Segregation Requirements and Funds in Cleared Swaps Customer Accounts……………………………………………… 19

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member of BOCI Commodities & Futures (USA) LLC Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of BOCI Commodities & Futures (USA) LLC (the “Company”) as of December 31, 2018 that you are filing pursuant to Regulation 1.10 under the Commodity Exchange Act, and the related notes and supplementary schedules (collectively referred to as the financial statement). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of BOCI Commodities & Futures (USA) LLC as of December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

This financial statement is the responsibility of BOCI Commodities & Futures (USA) LLC’s management. Our responsibility is to express an opinion on the Company’s financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to BOCI Commodities & Futures (USA) LLC in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission, the Commodity Futures Trading Commission (“CFTC”), and the PCAOB. We have served as BOCI Commodities & Futures (USA) LLC’s auditor since 2015.

We conducted our audit in accordance with the standards of the PCAOB and the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

Supplemental Information

The information in Supplementary Schedules (“the supplemental information”) has been subjected to audit procedures performed in conjunction with the audit of BOCI Commodities & Futures (USA) LLC’s financial statement. The supplemental information is the responsibility of the Company’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statement or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with Regulation 1.10 of the Commodity Exchange Act. In our opinion, the Supplementary Schedules are fairly stated, in all material respects, in relation to the financial statement as a whole.

Chicago, Illinois February 22, 2019

BOCI Commodities & Futures (USA) LLC (A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Statement of Financial Condition For the year ended December 31, 2018

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ASSETS Cash and cash equivalents $ 272,201 Cash segregated under federal and other regulations 8,596,742 Deposits with exchange clearing organization 15,184,717 Fixed assets (net of accumulated depreciation and amortization of $28,032) 41

Total assets $ 24,053,701

LIABILITIES AND MEMBER’S EQUITYLiabilities: Due to related parties $ 143,277 Payables to: Customers 16,942,581

Exchange clearing organization 196,575 Other payables and accrued expenses 62,453

Total liabilities 17,344,886

Liabilities subordinated to claims of general creditors 2,500,000

Member's equity 4,208,815

Total liabilities and member’s equity $ 24,053,701

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The accompanying notes are an integral part of these financial statements

BOCI Commodities & Futures (USA) LLC (A wholly owned subsidiary of BOC International (USA) Holdings Inc.) Notes to Statement of Financial Condition For the year ended December 31, 2018

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1 Organization

BOCI Commodities & Futures (USA) LLC (the “Company”) is a limited liability company formed in the State of Delaware on September 12, 2011. The Company is a wholly owned subsidiary of BOC International (USA) Holdings Inc. (the “Parent”), a Delaware corporation. The Company’s principal business activity is clearing of exchange traded futures and options contracts for institutional clients. The Company is a registered futures commission merchant (“FCM”) with the Commodity Futures Trading Commission, a member of the National Futures Association, and is a clearing member of all CME Group Inc. (“CME”) exchanges.

2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below.

Basis of preparation

The financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The financial statements are presented in US dollars, unless otherwise stated.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates. Commodities transactions Transactions in exchange traded futures and options are recorded on the trade date at the original price. Commodities futures and options held by the Company on behalf of customers are carried at fair value, and unrealized profits and losses are reflected in the client’s equity.


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2 Summary of significant accounting policies (continued)

Fixed assets Fixed assets are stated at cost less accumulated depreciation and ammortization. The Company provides for depreciation and ammortization as follows:

Cash and cash equivalents Cash includes funds with JPMorgan Chase Bank, N.A. and Bank of China New York Branch. For the purposes of the statement of cash flows, highly liquid investments with original maturities of three months or less are considered cash equivalents. Income tax The Company complies with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”), which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statements and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce the deferred income tax assets to the amount expected to be realized. ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740 also requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" to be sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. The tax years that remain subject to examination are 2016, 2017, and 2018. The Company determined that there are no uncertain tax positions, which would require adjustments or disclosures on the financial statements. The Company is included in the consolidated tax return of the Parent. The provision for income taxes is computed using a “separate return” method. Under this method, the Company is assumed to file a separate return with the tax authority, thereby reporting taxable income or loss and applying the applicable tax to or receiving the appropriate refund from the Parent. The current provision is the amount of tax payable or refundable on the basis of a hypothetical, current year separate tax return. Deferred taxes are provided on temporary differences and on any carry forwards that could be claimed on the hypothetical return and the need for a valuation allowance is assessed on the basis of projected separate return results.

Asset Estimated Useful Life Principle Method

Computer equipment 3 years Straight-line Furniture and fixtures 5 years Straight-line Computer software 3 years Straight-line


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2 Summary of significant accounting policies (continued)

Commissions & related clearing expenses

Commissions and related clearing expenses are recognized on a trade-date basis. Revenue recognition The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers. This amended guidance becomes effective for the first fiscal year following December 15, 2018. The guidance requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that is reflective of the consideration the entity expects in exchange for those goods and services. There were no material changes in its revenue recognition policies and no material impact on our financial statement as a result of the new standard.

3 Accounting developments – Accounting standards to be adopted in future periods

The Company adopted FASB ASC 842 Leases (“ASC 842”) effective January 1, 2019 under the Parent operating lease agreement. ASC 842 requires the recognition of all leases that are longer than one year onto the statement of financial condition, which will result in the recognition of a right of use asset and corresponding lease liability. The right of use asset and lease liability will be measured initially using the present value of the remaining rental payments. Management believes there will be no material impact on the statement of financial condition as a result of the new standard.

4 Assets segregated or held in separate accounts under federal and other regulations

The statement of financial condition on December 31, 2018, included assets segregated or held in separate accounts under the Commodity Exchange Act as follows:

Cash $ 8,596,742 Cash margin on deposit with exchange clearing organization 12,684,717 Payable to exchange clearing organization, net (196,575) ───────── $ 21,084,884 ═════════


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5 Deposits with exchange clearing organization

The statement of financial condition on December 31, 2018, included deposits with clearing organization carried at fair value as follows:

Margins Cash and cash equivalents $ 12,684,717 Guarantee deposit Cash and cash equivalents 2,500,000

───────── $ 15,184,717 ═════════

6 Fixed assets

Fixed assets consisted of the following at December 31, 2018: Computer equipment $ 19,051 Furniture and fixtures 1,610 Computer software 7,412 ──────── Fixed assets, at cost 28,073

Accumulated depreciation and ammortization (28,032) ──────── Net fixed assets $ 41

════════ 7 Short term bank loans

Currently, the Company does not have any bank loans but has an uncommitted credit facility with Bank of China New York Branch.

8 Subordinated borrowings

As of December 31, 2018, the Company borrowed $2,500,000 under a revolving subordinated loan agreement with an affiliate, BOC International Holdings Limited. See note 14 for details of the revolving subordinated loan agreement.


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9 Income tax expense

The Company’s income tax benefit of $384 relates to state, local, and other taxes.

Deferred taxes result from temporary differences between tax laws and financial accounting standards. As of December 31, 2018, the Company is unsure if the deferred tax asset of approximately $3,223,290, relating to the accumulated unutilized carry forward losses, will be realized through future taxable profits. As such, the Company established a full valuation allowance against this asset.

10 Concentration of Credit Risk

As of December 31, 2018 significant credit concentrations consisted of cash balances with the CME

Group, Inc., Bank of China New York Branch, and JP Morgan Chase & Co. of $15,184,717, $8,358,901 and $510,042, respectively. Management does not believe the Company has significant exposure to any credit risk on cash balances.

11 Defined contribution plan

Employees of the Company are eligible to participate in a defined contribution 401(k) plan (the “Plan”) upon meeting certain eligibility requirements. The Company contributes to the Plan the lesser of 6% of compensation or $18,500 per employee.

13 Guarantees

Accounting Standards Codification Topic 460 (“ASC 460”), Guarantees, requires the Company to disclose information about its obligations under certain guarantee arrangements. ASC 460 defines guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the guaranteed party based on changes in an underlying (such as an interest or foreign exchange rate, security or commodity price, an index or the occurrence or nonoccurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. This guidance also defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity’s failure to perform under an agreement, as well as indirect guarantees of the indebtedness of others.


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13 Guarantees (continued)

The Company is a member of CME, a clearing organization that clears futures and options contracts. Associated with its membership in CME, the Company may be required to pay a proportionate share of the financial obligations of another member who may default on its obligations to the exchange or the clearinghouse. While the rules governing different exchange or clearinghouse memberships vary, in general the Company’s guarantee obligations would arise only if the exchange or clearinghouse had previously exhausted its resources or and other available remedies. The maximum potential payout under this membership agreement cannot be estimated. However, the Company has not recorded any contingent liability in the statement of financial condition for this agreement and believes that any potential requirement to make payments under this agreement is remote.

14 Agreements and related party transactions

Related parties are those parties that have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or other entities.

The various CME exchange memberships required for the Company’s clearing activities are owned by an affiliate, BOCI Global Commodities Holdings Limited. The exchange memberships are registered to be used by the Company. The aggregate fair market value of the exchange membership is $2,030,000.

The Company has a service level agreement with its Parent under which general and administrative services are shared. On December 31, 2018, the Company had a payable to the parent totaling $125,702 and is reported as due to related parties on the statement of financial condition.

The Company has a service level agreement with BOCI Global Commodities (UK) Limited (“BOCI-UK”) under which BOCI-UK provides the Company risk management services. The Company had a payable to Bank of China International Holdings Limited (“BOCI-UKH”) totaling $11,862 and is reported as due to related parties on the statement of financial condition. Bank of China International Holdings Limited is the holding company of BOCI-UK. During the year, the Company entered into transactions with an affiliate, BOC International Holdings Limited (“BOCI-HKH”) for administrative activities, which are unsecured, interest free and payable upon demand. The transactions were covered under a service level agreement with BOCI-HKH. At December 31, 2018, a total of $5,713 was outstanding and is reported as due to related parties on the statement of financial condition.

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14 Agreements and related party transactions (continued)

The Company entered into a revolving subordinated loan agreement (“the Agreement”) with BOCI-HKH, on November 18, 2016. The Agreement terminates on November 18, 2023, the scheduled maturity date. The maximum amount that can be borrowed under the Agreement is $30 million with an interest rate of London Inter-bank Offer Rate (LIBOR) plus 2%. Any funds borrowed under the Agreement would be available in computing net capital under the Commodity Exchange Act. During 2018, the Company drew down a total of $1,000,000 under the Agreement. As stated in note 8, as of December 31, 2018, subordinated borrowings outstanding and payable to BOCI-HKH totaled $2,500,000, with a maturity date of November 18, 2023. Additionally, the Company maintains bank accounts and regulated bank accounts with the Bank of China New York Branch, a related party. As of December 31, 2018, the balances were $62,357 and $8,296,544, respectively, which were included in cash and cash segregated under federal and other regulations, on the statement of financial condition.

15 Minimum capital requirement

The Company is subject to the minimum capital requirements pursuant to regulation 1.17 under the rules and regulations of the CFTC (“CFTC Regulation 1.17”). Under CFTC Regulation 1.17, the Company is required to maintain net capital equivalent to the greater of $1,000,000 or the sum of 8% of the customer risk maintenance margin requirement plus 8% of the non-customer risk maintenance margin requirement or another dollar requirement set by a registered futures association of which it is a member. Under the rules of the CME, the Company is required to maintain net capital equivalent to the greater of $5,000,000 or 8% of the customer risk maintenance margin requirement plus 8% of the non-customer risk maintenance margin requirement. On December 31, 2018, in accordance with CFTC Regulation 1.17, the Company had adjusted net capital of $6,646,417, which was $5,646,417 in excess of its required net capital of $1,000,000. Under the requirements of the CME, the Company's minimum capital requirement and adjusted net capital were $5,000,000 and $6,646,417, respectively. The net capital rule may effectively restrict member withdrawals.


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16 Fair value measurement and disclosures

ASC Topic 820, Valuations (“ASC 820”) defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by ASC 820, are used to measure fair value.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 are unobservable inputs for the asset or liability and rely on management’s own assumptions that market participants would use in pricing the asset or liability. The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company’s own data. The Company held no Level 1, Level 2 or Level 3 assets as of December 31, 2018.

17 Subsequent events

The Company’s management has evaluated events and transactions through February 22, 2019. No material events requiring disclosure in the financial statements were found.

Supplementary Schedules

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BOCI Commodities & Futures (USA) LLC Schedule 1Reconciliation of Statement of Financial Condition to Minimum Net Capital RequirementsDecember 31,2018

Total Assets per statement of financial Condition $ 24,053,701

Add/(Deduct) Reclassification of settlement due to clearing organization (196,575)

Deduct: Noncurrent assets (as defined)Cash (at affiliate bank) $ (62,357)Fixed Assets (41)

(62,398)Current Assets Under CFTC Regulation 1.17 $ 23,794,728

Total Liabilities per statement of financial condition $ 17,344,886

Add/(Deduct) Reclassification of settlement due to clearing organization (196,575)Liabilities Under CFTC Regulation 1.17 $ 17,148,311

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BOCI Commodities & Futures (USA) LLC Schedule 2Statement of the Computation of Net Capital and Minimum Capital RequirementsDecember 31,2018

Current assets, as defined (see reconciliation on prior page) $ 23,794,728

Adjusted total liabilities (see reconciliation on prior page) $ (17,148,311)

Net capital 6,646,417

Charges against net capital:Twenty percent of market value of uncovered inventories $ — U.S government obligations (fair value $________) — Corporate equities (fair value $_________) — Other securities (fair value $________) — Charges against securities purchased under agreements to resell — Undermargined customer commodity futures accounts — Charges against open commodity positions - proprietary — Five percent of unsecured receivables from foreign brokers — —

Adjusted net capital (net capital less charges against net capital) 6,646,417

Net capital required using risk-based requirement:Amount of customer risk maintenance margin $ 12,336,359 8% of customer risk-based requirement 986,909 Amount of noncustomer risk maintenance margin8% of customer risk-based requirement —

— Minimum dollar amount requirement $ 1,000,000

Amount required 1,000,000 Excess net capital 5,646,417

Computation of Early Warning LevelEnter 110% of risk-based amount required $ 1,500,000

There are no material differences between this computation and the Company’s

corresponding unaudited Form 1FR-FCM filing as of December 31, 2018

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BOCI Commodities & Futures (USA) LLC Schedule 3Statement of Segregation Requirement and Funds in SegregationDecember 31,2018

Segregation requirement:Net ledger balance:

Cash $ 29,564,107

Securities — Net unrealized loss in open futures contracts traded on a contract market (12,621,526) Exchange traded options:

Market value of open options contracts purchased on a contract market —

Market value of open options contracts sold on a contract market —

Net equity 16,942,581

Accounts liquidating to a deficit and accounts with debit balances withno open trades (offset by customer owned securities totaling $_______) —

Amount required to be segregated 16,942,581

Funds on deposit in segregation:

Deposited in segregated funds bank accounts:

Cash 8,596,730

Securities representing investments of customers’ funds, at market — Securities held for particular customers in lieu of cash margins, at market —

Margins on deposit with clearing organizations of contract markets:Cash 12,684,717

Securities representing investments of customers’ funds, at market —

Securities held for particular customers in lieu of cash margins, at market —

Net settlement payable to clearing organizations of contract markets (196,575)

Exchange traded options:Value of open long option contracts — Value of open short option contracts —

Net equities with other futures commission merchants:Net liquidating equity — Securities held for particular customers in lieu of cash margins, at market —

Customers’ segregated funds on hand (warehouse receipts) —

Total amount in segregation 21,084,872 Excess funds in segregation $ 4,142,291 Management target amount for excess funds in segregation $ 1,000,000 Excess funds in segregation over management target amount excess $ 3,142,291 There are no material differences between this computation and the Company’s

corresponding unaudited Form 1FR-FCM filing as of December 31,2018

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BOCI Commodities & Futures (USA) LLC Schedule 4Statement of Segregation Requirement and Funds in Segregation for Customers' Dealer Options December 31, 2018

The Company does not carry customers' dealer option accounts as defined by Commodity Exchange Act Regulation 32.6. Therefore, the Company is exempt from Regulations 32.6.

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BOCI Commodities & Futures (USA) LLC Schedule 5Statement of Secured Requirement and Funds Held in Separate AccountsDecember 31,2018

Amount required to be set aside in separate Section 30.7 accounts $ — Funds on deposit in separate Section 30.7 accounts:

Cash in banksBanks located in the United States $ 6Other banks designated by the Commission

0 6

Equities with registered futures commission merchants(Name of FCM)Cash $ 0Unrealized gain on open futures contracts 0 —

Amounts held by clearing organizations of foreign boards of trade(Name of Clearing Org)Cash $ 0Amount due from clearing organization - daily variation 0 —

Amounts held by members of foreign boards of trade(Name of brokers)Cash $ 0Unrealized gain on open futures contracts 0Securities on deposit 0Value of long option contracts 0Value of short option contracts 0 —

Total funds in separate Section 30.7 accounts 6 Excess (deficiency) Set Aside Funds for Secured Amount 6 Management Target Amount for Excess Funds in Separate Section 30.7 Accounts 1 Excess (deficiency) funds in separate Section 30.7 accounts over (under) Management Target Amount Excess $ 5 There are no material differences between this computation and the Company’s

corresponding unaudited Form 1FR-FCM filing as of December 31, 2018

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BOCI Commodities & Futures (USA) LLC Schedule 6Statement of Cleared Swaps Segregation Requirements and Funds in Cleared Swaps Customer Accounts

December 31,2018

Cleared Swaps Customer RequirementsNet ledger balance:

Cash $ — Securities —

Net unrealized profit (loss) in open cleared swaps — Cleared swaps options

Market value of open cleared swaps options contracts purchased — Market value of open cleared swaps granted (sold) —

Net equity —

Accounts liquidating to a deficit and accounts with debit balances withno open trades (offset by customer owned securities totaling $0) —

Amount required to be segregated —

Funds in Cleared Swaps Customer Segregated AccountsDeposited in cleared swaps segregated accounts at banks:

Cash 6 Securities representing investments of cleared swaps customers’ funds, at market — Securities held for particular cleared swaps customers in lieu of cash, at market —

Margins on deposit with clearing organizations in cleared swaps segregated accounts:Cash — Securities representing investments of cleared swaps customers’ funds, at market — Securities held for particular cleared swaps customers in lieu of cash, at market —

Net settlement receivable from clearing organizations — Cleared swaps options:

Value of open cleared swaps long option contracts — Value of open cleared swaps short option contracts —

Net equities with other futures commission merchants:Net liquidating equity — Securities held for particular cleared swaps customers in lieu of cash, at market —

Cleared swaps customer funds on hand —

Total amount in cleared swaps customer segregation 6

Excess funds in segregation $ 6

Management target amount for excess funds in cleared swaps segregated accounts $ 1

Excess funds in cleared swaps customer segregation over management target excess $ 5

There are no material differences between this computation and the Company’scorresponding unaudited Form 1FR-FCM filing as of December 31, 2018

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